India’s Double Play: Still Buying Russian Oil While Demanding U.S. Drop 25% Tariff
New Delhi walks a geopolitical tightrope—fueling its economy with discounted crude while negotiating trade relief from Washington.
The Energy Balancing Act
India continues securing Russian oil imports, leveraging discounted prices to manage domestic energy costs. This strategic procurement provides a buffer against global market volatility.
The Tariff Tug-of-War
Simultaneously, Indian negotiators press U.S. counterparts to eliminate that 25% duty—a move that would boost export competitiveness across multiple sectors. The dual-track approach reveals calculated economic pragmatism over political alignment.
Market Calculus Over Diplomacy
The maneuver demonstrates how national interest routinely trumps alliance politics. While Western capitals lecture about energy independence, emerging economies simply crunch the numbers—and buy where it's cheapest. Another reminder that in global trade, sentiment is for speeches; spreadsheets drive decisions.
One cynical finance jab: Wall Street analysts would call this 'arbitrage'; everyone else calls it 'having your cake and eating the 25% discount too.'
State refiners continue buying Russian crude
Data from energy analysts shows that overall Russian crude imports into India fell in December. The drop did not come from state buyers. It came from Reliance Industries, owned by Mukesh Ambani, which cut purchases after U.S. sanctions hit Lukoil and Rosneft in late November. Reliance had been a major buyer before those sanctions.
Public sector undertakings filled part of that gap. These include Indian Oil Corporation and Bharat Petroleum Corporation. Muyu Xu, senior crude oil analyst at Kpler, said these firms continued to buy Russian crude for future delivery using suppliers not under sanctions. After that first mention, Xu said the buying did not stop.
The United States has kept pressure on India to scale back Russian oil purchases. U.S. officials say those sales help Moscow handle Western sanctions tied to the war in Ukraine. Analysts say the buying pattern changed, not collapsed.
Pankaj Srivastava at Rystad Energy said overall imports fell but state refiners kept intake steady.Rystad estimates imports dropped by about 300,000 barrels per day since November to 1.7 million barrels per day.
Srivastava said a recovery to 1.8 million barrels per day is expected in January. After his first mention, Srivastava said state refiners kept processing Russian crude due to fuel demand and pricing.
Kpler data also showed a decline. Imports fell by 595,000 barrels per day in December to 1.24 million barrels per day. That was the lowest level since December 2022. India remained one of the largest buyers even after the drop.
Russia expands shadow fleet as sanctions tighten
Russia has taken steps to protect oil shipments elsewhere. A Wall Street Journal report said Russia sent a submarine and other naval assets to escort an oil tanker off the coast of Venezuela.
The report said the situation became a new flashpoint in U.S. Russia relations. Trump has said U.S. oil companies will invest billions of dollars in Venezuela’s energy sector after the overthrow of Nicolás Maduro.
Chevron, ConocoPhillips, and ExxonMobil are expected to meet the administration. Trump said the companies WOULD be reimbursed by the U.S. or paid through revenue.
Richard Meade, editor in chief of Lloyd’s List, said ships are switching flags fast. Meade said seventeen shadow fleet tankers moved from fraudulent flags to the Russian flag in recent weeks. After his first mention, Meade said the shift accelerated.
One vessel is the Bella 1, stopped by the United States on Dec. 20 while heading to Venezuela to load sanctioned crude. At the time, the ship used a fake Guyana flag. On Dec. 31, Russia told the U.S. the ship was renamed Marinera and registered under Russia. The vessel later left the Caribbean.
Automatic Identification System data tracked by Lloyd’s List shows the ship NEAR Iceland and heading toward Russia. Meade said Venezuela risk is pushing Russia to absorb more shadow fleet vessels.
He said this shows a longer term structure with Moscow overseeing these ships. He said the next question is whether the U.S. will stop a Russian flagged tanker.
Not all ships have left Venezuela.The Premier, reflagged from Gambia to Russia on Dec. 22, remains empty near the Jose terminal.
Meade said other ships trying to leave are also using fake flags. Lloyd’s List said over 40 shadow fleet ships joined the Russian registry since June. Data shows more than 12% of the global tanker fleet now operates in the shadow fleet.
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